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Inventing the Smart Phone: Why the ‘Trolls’ Were Saviors

Dr. Rocco Leonard Martino, inventor of the CyberFone, the first Smart Phone.

A major car company is running commercials about companies that started in a garage. Amazon, Apple, Disney, Hewlett Packard and the Wright Brothers all started in a garage. The advertisement extols innovation, and the modest roots of great discovery and great companies. By implication, it hopes to align the public image of its cars coming out of a garage with these very successful companies. But the car company ad is wrong. It is highly unlikely these companies would ever get started in today’s hostile environment for the small innovator or company.

Let me tell you why. This is a first hand account of my experiences with inventing the Smart Phone.

It became obvious to me in 1994 that the voice transmission over traditional telephone systems could be done using computers linked to telephone, cellular or internet networks. That was the origin of the concept of a smart phone utilizing the computer in support of multimedia traffic. I called it the CyberFone, filed for patents in 1995, and built models during that same period to demonstrate to interested parties, including the patent office. I expected accolades for coming up with a useful idea, and proving it could be done, but that never happened. Some thought the screen was too small, others thought the concept of touch would never catch on, or that no one would want to make phone calls using a computer. One great business genius told me it was a software world and that no one was interested in hardware. That was a ridiculous statement. How could software run without a machine? Apple became the most valued corporation in the world by combining hardware and software.

It’s tough trying to market a new product, no matter how exciting or useful it is. In fact, the more revolutionary the product is, the harder it is to gain acceptance. Disruptive technologies that lead to new industries are often delayed because they upset the status quo. It was Nicolo Machiavelli who enunciated this basic problem in his book “The Prince” in 1513. In today’s idiomatic language, he stated, “There is nothing more likely to fail than a new system or invention, since it meets with the enmity of all those who are affected by it and receives only lukewarm support from all those who will benefit.” The inventors of such disruptive technologies or devices are frequently ridiculed and often end up penniless. Johannes Gutenberg was met with tremendous resistance, even being accused of consorting with the devil, when he created his first printing press in the fifteenth century, even though his first book was the Bible. Rudolf Diesel died penniless; Frank Whittle had trouble meeting payments on his patent for the jet engine, which he filed in 1930. John Mauchly and Presper Eckert, who invented the first digital computer, the ENIAC, in 1946, could not secure funding to monetize their great invention, and ultimately sold their company for a pittance.

In my case, I could get no financial support for my invention, which is why I set out to fund the project myself. It was a horrendous undertaking. Some obstacles included building prototypes, demonstrating to potential buyers, going to shows, extending the patents with new filings in different countries, writing programs to demonstrate the capability of my invention, and so on. When I was finally ready to go into production, the chip supplier falsified the actual performance specs. The chips I selected for the production versions only transferred data at ten percent of the rated speed, which was too slow. It was the year 2000. The whole thing, in a sense, blew up in my face. By the time I could recover from this disaster, the dot.com crash occurred, the orders evaporated, and I ran out of money.

Next, I tried to interest manufacturers in licenses. That went nowhere. One company officially told me no one would take me seriously until they were sued, so I set out to sue a few organizations that I felt were infringing. I could not find a law firm that would take the case. Firm after firm said they had a conflict of interest. This took years. As far as trying to manufacture, it seemed as though the train had left the station. What could I do? I could not get a major law firm to represent me in litigation because of client conflict, even when such firms were filing my patents. I could not go into manufacturing because I could not get funded. I could not sell licenses, even to infringers, because I had not sued them. This is when patent accumulators came into play. The opposition called them “trolls.” To me, they were “ saviors.” They provide the experience and leverage individual inventors need to get the attention of those who take what they want without repercussion.

I turned to patent accumulation firm Marathon Patent Group (headed by Doug Croxall), who in turn engaged IPNav, (founded by Erich Spangenberg), and we struck a deal. Without Doug and Erich, my patents would have gone nowhere. Thanks to their efforts, along with the fiercely supportive legal teams at Russ August & Kabat and Mishcon de Reya New York, LLP, companies have recognized the value of my technology and acquired licenses. As an inventor, I am gratified at this success, but more importantly, I am heartened that the hard work and creativity has finally been recognized. It is unfortunate that justice can only be achieved with the application of the adversarial process of litigation. With the billions in profit achieved on smart phones, I would have thought the inventor would have at least received a thank you instead of a brush off. Organizations like IPN and Marathon make it possible for the sole inventor to survive while swimming with sharks.

Though we started getting some return for the tremendous investments I had made in time and treasure with the CyberFone or the Smart Phone, there was great resistance to paying royalties on my patents. At one court hearing, the defendants ridiculed my invention to cloud the issue of their infringement. Facts became irrelevant amidst the name calling, which seems to be the norm in this arena. There is a great hue and cry today about the patent trolls – a derogatory term applied to patent accumulators. But the trolls are not infringing. They are called trolls by infringers. When I was a little boy, we used to chant, “Sticks and stones may break my bones but names will never hurt me.” Maybe not in the real world, but the world of lobbying and high finance is a different story. There would be no ‘trolls’ if there were no infringers. The patent accumulators are providing a vehicle for small inventors to gain some return for their hard work in creating something new. Without such innovation, we would be stagnant. Innovation is crucial in progressing economically.

We need new industries to create jobs and opportunities for the millions of people all over the world who are having trouble finding employment. If we stifle innovation and prevent people from being creative and developing ideas, we will spiral downward. We must decide if we want the people of today to have a better future than their parents or grandparents.

If the government is sincere about stimulus to create jobs, then the government should set up a competition for new inventions and support what gets invented. A criminal is given the benefit of a Public Defender. An inventor is given nothing. Why not a government funded Inventor Defender? Criminals get help, but those who seek to benefit the country and the world get no help. But, you say, that’s the SBA. Try getting an SBA loan for a new invention!

An even better idea would be for the government to honor the laws that protect inventors instead of changing the rules to protect companies.

About the Author

Dr. Rocco Leonardo Martino is founder and Chairman of the Board of CyberFone Technologies Inc. Most recently he was Founder, Chairman and CEO of XRT, Inc., the world leader in providing complete global treasury, cash and banking relationship management solutions for some of the world’s largest corporations and government entities. Dr. Martino is the inventor of the CyberFone, the first Smart Phone, and the driving force behind the software systems permitting real-time video, voice and data linkages. Dr. Martino is also the author of twenty published books as well as scores of papers, and numerous corporate monographs on computers, communications, networks, and planning.

The Author

Warning & Disclaimer: The pages, articles and comments on IPWatchdog.com do not constitute legal advice, nor do they create any attorney-client relationship. The articles published express the personal opinion and views of the author and should not be attributed to the author’s employer, clients or the sponsors of IPWatchdog.com. Read more.

Discuss this

There are currently 21 Comments comments.

Independent InventorMay 1, 2014 4:31 pm

Thanks for the great story, example, and lesson, Dr. Martino.

Like you, I, too was unable to obtain financing for my invention (I sure couldn’t afford the $500,000 I was quoted by a company to build it). And a few years later when others began using and profiting from it, I also asked nicely if they would like to discuss a license or some other business relationship.

But instead of talking with me, their responses were to deny, threaten, or ignore.

Though I never thought it would come to this, I, too have been left with no other choice but to look to the generous, professional legal assistance of others and our court / jury system for help.

Why do we have to sue these infringers to get them to do the right thing?

Why do some congressmen and woman want to take away our American right to fair and reasonable compensation for our inventions from those who are profiting from them?

AnonMay 1, 2014 4:59 pm

Not to be too jaded, but

“Why do some congressmen and woman want to take away our American right to fair and reasonable compensation for our inventions from those who are profiting from them?”

Do you really need to a$k?

Gene QuinnMay 1, 2014 6:20 pm

Maybe slightly off topic, but have you read David Kappos’ open letter to President Lincoln published by MIP? See:

It is absolutely brilliant and a must read. I wish I had thought of doing it!

MaxDreiMay 2, 2014 3:15 am

A thought-provoking read. Thanks for that.

But tell me, Dr Martino, is a patent term of 20 years from filing long enough, in your technical field, or would you advocate rather 17 years from issue?

NWPAMay 2, 2014 7:43 am

I am not sure about the time frame of this. Seems to be that there was Internet on telephones in Europe by 1996 or even earlier. GSM made that easy and there was a little browser you could use, and Nokia even had a smart phone by like 1998 that they show cased at shows. It was functionally what the iPhone is. It downloaded and ran apps. The pipe was just too small.

Still I am a bit skeptical about the time frame of this.

AnonMay 2, 2014 8:45 am

MaxDrei’s post at 4 made me stop and think for a moment.

Has there been any modern day studies to attempt to determine optimum patent term?

Not even broaching the subject of different terms for different art fields (which would be extremely problematic to have, given the lack of ability to know a priori the overall value of any particular innovation), it would seem that any type of forward looking determination of proper term is a guess at best.

The mind then naturally (or not) ventures to the nearly order of magnitude difference between the terms for patents and for copyrights.

Nice story, but I am more skeptical than NWPA about the timing, given that the IBM Simon smart phone (sold by BellSouth) was already on display at COMDEX Fall 93, where it won best of COMDEX, and at COMDEX 94 where it won the Byte Award of Distinction. BusinessWeek had articles about it in September 94. Do a web search for IBM Simon and COMDEX (http://www.androidauthority.com/ibm-simon-birthday-134255/). It seems like the disinterest was because Dr. Martino was “late to the dance.”

Paul F. MorganMay 2, 2014 12:03 pm

Of course the term of newer patents is not just 20 years from the original filing date. It is very often considerably longer than that, because the patent term statute provides plural complicated term extensions for various PTO delays, vis a vis applicant delays.* Those statutory extensions were provided with the intent that inventors would still get a term of about 17 years from the patent issue date if they did not engage in the issue delaying tactics, such as serial continuations, etc., that were encouraged by the old patent term.
Whether that has been fully achieved for most applicants would indeed make for an interesting study, But it would first have to define whether or not various applicant actions, like RCEs, CIP’s, or long delayed divisionals, were for applicant delays, or not?

*or, considerably shorter by not paying maintenance fees

Gene QuinnMay 2, 2014 12:20 pm

Dubious-

It is certainly worth asking the question you raise, but if he were really late to the dance then why would others have taken licenses and paid him for the rights once he brought in larger players who could help him monetize his patent rights? Sure, today there are ways to monetize for less than nuisance value even with bad patents that aren’t infringed. Back in the early and mid 1990s that wasn’t the case.

-Gene

DubiusMay 2, 2014 12:57 pm

I was not saying that he did not invent or claim something that may have been infringed by 2000 or so. Rather, I was taking issue with his claim to have INVENTED the Smart Phone. Take a look at his base patent US5805676. Gene — you have been around the block long enough to know how often, and the extent to which, people (both inventors and plaintiffs’ lawyers) overstate the scope of what they or their client invented. With only the most cursory look, his base patent belies his broad assertion. Now that doesn’t mean that what he DID invent isn’t meritorious (I am not about to review or pass on its validity), but if he did his own research at the time he filed, he would have seen THEN that he didn’t “invent the Smart Phone.” To make that broad claim now is just silly.

As to others taking a license, perhaps by then it was clear that the market was big enough and profitable enough for the players to take a license to avoid a litigation if there was some aspect that they might have to defend against; even more so if he had continuations alive that he could use to cover them and/or foreign counterparts.

step backMay 2, 2014 1:59 pm

I’m surprised not much has been made of the CAFC panel decision by Judge Lourie versus Cyberphone where the court ruled that the invention is too “abstract”:

“It is outrageous,” says Congressman Bob Goodlatte, who is the chairman of the House Judiciary Committee which oversees the patent system. “It’s become a multi-billion dollar industry.”
He says the patent troll business model needs to be dismantled.”

AnonMay 2, 2014 3:28 pm

Paul Morgan at 9:

One (slight, possibly semantic) error to be corrected: “ such as serial continuations” – such are not delays of any kind. Such a continuation is considered its own application. Yes, the clock date is the claimed parent application date, but that has quite a different meaning than the one implied in your comment.

Gene QuinnMay 2, 2014 3:50 pm

Dubious-

I understand what you are saying, but I don’t think I would say what Dr. Martino is saying is overblown. The term “smartphone” is one that can mean so many different things really, and there are so many different breakthroughs that were required in order to achieve what today we all regard as a smartphone. This is much the same, in my opinion, as a discussion of who invented the Internet. There are a least a handful of contenders who can lay a legitimate claim to inventing the Internet.

Cheers.

-Gene

MaxDreiMay 2, 2014 5:56 pm

I understood that Al Gore was one of the illustrious handful who invented the Internet and Dr Martino one of those who invented the SMARTPHONE (TM).

In that regard, Gene, how many misapprehensions am I laboring under?

Gene QuinnMay 2, 2014 7:05 pm

Max-

I don’t actually think Al Gore invented the Internet, although as the story goes he was quite willing to take credit for the Internet being his idea/brainchild.

-Gene

MaxDreiMay 3, 2014 4:21 am

Gene, as you so rightly point out: it’s all a matter of “the many different breakthroughs that were required”.

But what is a “breakthrough”. Hardly a day goes by without my feeling I’ve made one. It’s a good feeling.

In the context of technological innovation, there are breakthroughs in public acceptance, in commercial success and in the technology itself. Plenty of room for lots of people to lay claim to each of them.

I suppose Dr Martino is convinced that he made a crucial Smartphone breakthrough. Good for him.

step backMay 3, 2014 8:21 am

Looks like even the choir members who regularly visit here are part of the invention pooh poohing club

“Nah, even if you did invent something different, it isn’t big enough of a different such that you deserve compensation for your work”.

Tom GallagherMay 3, 2014 10:13 am

I think I am in agreement with Gene or he with me that the anti-troll movement was created by large corporate infringers and not mom and pop coffee shops. Abusive litigation is not something new that was made possible by patents.

Companies that are willing to enforce an inventor’s patent on a contingency fee basis are a service to everyone. They allow patents to do what they were intended to do, reward the inventor.

If you don’t like the kind of patents being enforced, take it up with the patent office

Robert FletcherMay 5, 2014 9:17 am

I can empathize with the Author. We (IPISC) have been offering IP defense and enforcement insurance for 23 years and have met the same frustrations. Patent Attorneys, Insurance companies and Insurance agents and brokers have all steadfastly resisted the change with a miriad of excuses. Finally , with our successful suport of and win in the Octane Fitness Case we’re getting recognition of the tremendous benefits of an insurance policy that funds Litigation Expenses. You don’t need the Trolls anymore – there’s an even better way.

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